AMEX Costco TrueEarnings Card Unauthorized Charges

By Sun

I have an AMEX Costco TrueEarnings card, which I use to shop only at my local Costco and once in a while at restaurants to get 3% cashback (higher than the 2% universal cashback I get from my Fidelity 529 Rewards card). I don’t use it at grocery stores, I don’t use it at gas stations, and I don’t use it to shop online.

Because of the simple use of this card, I gradually developed a bad habit of assuming everything is right. Every month when I pay the bill, I don’t really go through the charges on the cards. Instead I only take a look at the total number and if it seems right, I just go ahead and pay it off. Then last night when I was checking my account to make sure last payment has been posted, there was a charge of $37.90 from last week caught my eyes.

It’s not the amount that looks suspicious (it could slip away if I only read the numbers), but where the charge came from.

Netherlands!? What the heck was my card doing in Netherlands?

I immediately called AMEX and asked them to take a look exactly where the charge was coming from. While I was waiting, I pulled out my previous statements and found two charges with exactly the same amount in December and January. Several minutes later, the CSR gave me a payment processing website in Netherlands and from there I used my card number (yeah, I didn’t feel comfortable of giving my card number to some site in Netherlands, but that was the only way for me to find out who made the charge) to track the source merchant which led me to another site in UK!

After an hour-long phone call, what AMEX told me was:

I will get a refund for all three charges;

They can’t stop any future charges from that merchant, even the charge was definitely unauthorized and may be fraudulent;

Since it has happened three times in a row, they treat it as an automatic bill and the bill will keep coming even if I cancel the card;

They will conduct an investigation by contacting the merchant (presumably the one from UK) and telling them to stop using my card;

If the investigation determines the charge was a mistake, the issue should be resolved by then; otherwise, they will open a fraud investigation;

The investigation will take 6 to 8 weeks and I will have to call them if I see the same charge again next month, which I assume I will, on my statement;

During the investigation period, I can keep using my card and will not be held liable for any charges that are unauthorized.

Though I kept telling them that I don’t feel comfortable of using my card when I know there’s somebody in UK is using it as well, there’s really nothing I can do now to prevent the charge from appearing on the next statement. Canceling the card doesn’t help because, as they said, the current card will keep receiving the bill even if the account is closed. That can only stop future new charges, but not the existing recurring ones.

If I had read my statements more carefully, I could have spotted it two months earlier so it wouldn’t become a recurring event that even AMEX could do nothing about it (at least before the investigation ends). Now, in addition to the cashbacks that I have been enjoying, I get myself a major headache. No wonder so many people don’t use credit cards at all.

And how could my card, which never left my wallet without my knowledge, get into somebody’s hands in UK?

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4 Responses to “AMEX Costco TrueEarnings Card Unauthorized Charges”

Netherlands, LOL That is weird. I do not use credit cards, but one thing I can say, if I was ever to get one –AMEX will be my choice.

It was nice of them to give you the refund. Other companies would have freeze your credit privilages.

Seems like these days you are never 100% safe.

Tomaste | Feb 23, 2007 at 3:09 pm

Hi Sun,

While I don’t read every statement that comes through, I do see every transaction I make. I use a budgeting service called mvelopes.com. When I was desperate to get my finances under control, and blindly searching for a tool to help, I stumbled upon them, and it changed the way I look at and spend my income. It ties into any online account you wish to add. (I do my checking account and any credit cards) and shows you a log of every transaction you make. You then drag each transaction into a virtual envelope, simulating the old school envelope style budgeting.

Might be worth looking into! (I am not affiliated with mvelopes, just love the product!

Sun: I am sorry about your trouble but some of the best lessons are learned the hard way. So take it in that way.

Like Tomaste says..use some credit card management system. I use Yodlee and it has been awesome so far. (and I am not affiliated with Yodlee either). The point is that use any system that gives you all transactions at a glance. That way sometimes you will spot the trouble right after it happens…you don’t have to wait till your card statement.

But whether it’s transactions or statements..you got to read something to keep stuff in control.

I’d expect that you’ll have more of a hair-trigger fraud alert on your card now. I had a fraudulent charge taken off one of my cards, and now they’ll freeze my card if any charges look suspicious. They don’t tell me that it’s frozen; I have to find out it’s frozen by trying to buy something and having the card denied. I call them up, they unfreeze my account, and then I have to go back to start the buying process all over again. It’s a pain. Not my fault that the (one) charge came on my account, but now they’re making it harder for me to use the card by proactively stopping charges from going through.

AMEX may be better about it than my card, but if it’s not, sorry about that!

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